A representations of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021.
Dado Ruvic | Reuters
The cryptocurrency market had around $130 billion wiped off its value over the last 24 hours as major digital coins continued their multi-day sell-off.
Bitcoin was down around 6% at $33,352.50 at 6 a.m. ET, according to CoinDesk data, the lowest level since July 24, 2021. Bitcoin is around 51% off its record high hit in November.
Ether plunged 12% to $2,218.37, its lowest level since late July, according to CoinDesk data. Ether is about 53% down from its Nov. 2021 all-time high.
The movements in cryptocurrencies have correlated to selling seen in higher-risk assets like technology stocks as investors prepare for tighter monetary policy from the U.S. Federal Reserve and higher interest rates.
“BTC (bitcoin) and crypto have been reacting much more violently, given the nature of the asset class and we’re likely to test 30-32K given current sentiment and momentum,” Vijay Ayyar, vice president of corporate development and international expansion, told CNBC by written message.
Ayyar said that if bitcoin holds above $30,000 on a longer time frame such as one week, then there could be a base formed at those levels before the market moves higher.
“But for the market to really be bullish will take a while, given the lack of confidence across the spectrum,” Ayyar added.
Investors are also grappling with higher inflation. Bitcoin proponents often suggest the digital coin is a hedge against inflation, but that theory has not held up so far. Analysts said there is a concern a more hawkish Fed could take the wind out of the crypto market’s sails.
Meanwhile, investors are also assessing the impact of further regulation on the cryptocurrency market. Last week, Russia’s central bank proposed banning the use and mining of cryptocurrencies.